The Serious Fraud Office has been called in by the justice secretary to investigate the private security company G4S for overcharging tens of millions of pounds on electronic tagging (ankle bracelets) contracts for offenders.

Chris Grayling told MPs the overcharging included billing for tracking the movements of people who had moved abroad, those who had returned to prison and had their tags removed, and even people who had died.

He said he had made the decision after G4S refused on Wednesday to co-operate with a voluntary forensic audit of its billing practices and to withdraw as a potential bidder for the next generation of tagging contracts worth up to £3bn.